Which of the Following Statements Is (Are)true with Respect to the Cash

question 28

Multiple Choice

Which of the following statements is (are) true with respect to the cash (lump sum) annuity settlement option?
I.The taxable portion of the distribution is subject to federal and state income taxes.
II.The option results in adverse selection against the insurer as those in poor health are more likely to take cash than to annuitize the funds.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Taft-Hartley Act

A 1947 federal law in the United States that restricted the activities and power of labor unions.

National Industrial Recovery Act

A law passed in 1933 as part of the New Deal, aimed at stimulating economic recovery during the Great Depression by regulating industry.

Rights Dispute

A disagreement over the legal or contractual rights between two or more parties, often involving interpretation or enforcement of those rights.

Grievance

A complaint or protest regarding unfair treatment, especially one made by an employee against their employer or working conditions.